Completely rejected by banks, Ripple wants to become the Amazon of payments

in #gems4 years ago

Ripple Suffers Because of Banks - Ripple Company offers technology solutions for cross-border interbank payments. But in the face of low adoption by banks, the company will expand the spectrum of use of its protocols.

XRP is still the third most capitalized cryptocurrency

In terms of valuation, Ripple is a success. The XRP token has been in third position in the cryptocurrency market cap for a very long time, with a capitalization of 11.3 billion euros.

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According to Brad Garlinghouse, the value of XRP is an important factor for Ripple. Indeed, token sales are used to finance the company and to encourage its partners to use its technology. But the primary purpose of the token has always been to provide a useful and innovative system. Unfortunately, the adoption of this technology is taking much longer than expected.

Banks were Ripple's first target. Indeed, the firm aims to provide a fast and inexpensive cross-border payment settlement system. But Ripple has chained the setbacks. For example, Spanish bank Santander finally decided not to use XRP within its new payments network.

Strategy change for Ripple

According to Brad Garlinghouse, US financial authorities, who have yet to decide whether XRP is a security or not, are not helping the firm grab the banks' attention.

Ripple then turned to remittances, remittances from immigrant workers to overseas. This justifies the choice to collaborate with MoneyGram or with Bitso, a South American exchange.

So far, we can say that this operation was a success. In June, 7% of payments between the United States and Mexico were handled by this technology. Of course, this comes at a cost to Ripple: MoneyGram announced that 60% of its profits came from development fees granted by Ripple (31 million $).

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Ripple therefore wishes to continue to increase the use of its technological solutions. To do this, she distributed over $ 500 million to various startups, through her fund, Xpring. Here the results are mixed. If this economic incentive works, in the sense that it has encouraged partner companies to use its technology, it is costly for Ripple.

For example, the start-up Coil, using Ripple for its blogging platform, spent $ 2,250 to pay one of its authors, but the latter received only 15 $ in XRP through the solution in place.

This prompted Ripple to abandon this system of subsidies and instead make development tools available to its partners. The new strategy is therefore to greatly broaden the spectrum of use of its technologies.

“Amazon started out as an online bookseller and only sold books. We happened to start with the payments. […] In 2 years, you will find out that Ripple is to payments what Amazon was to books". Brad Garlinghouse, CEO of Ripple, for the Financial Times.

This new strategic direction may allow Ripple to restore its reputation with part of the cryptosphere. Indeed, some consider the company too close to banks, a position contradictory to the first promises of cryptocurrencies. In the meantime, the price of XRP rebounded well during the month of July, going from 15 to 25 cents.